IRS needs to do more to prevent fraudsters from swiping taxpayer personal information to steal refunds, the Government Accountability Office urged today Photographer: Andrew Harrer/Bloomberg
The Internal Revenue Service is not doing enough to prevent ID theft, the Government Accountability Office charged today.
“Even as IRS has adapted its IDT defenses, fraudsters have developed more complex and sophisticated methods to bypass those defenses and commit fraud undetected, the investigative arm of Congress said in a new study.
GAO warned IRS may not be positioned to address its greatest vulnerabilities to authenticate that people communicating with it are the taxpayers they claim to be in a timely manner.
The report chastised the tax collector for failing to evaluate potential new authentication technologies.
The researchers said industry representatives, financial institutions, and government officials told them the best authentication approach relies on continuously evolving multiple strategies and sources of information which can help give taxpayers options for actively protecting their identities.
One way fraudsters steal refunds, according to the report, is filing false employer W-2 forms.
“With this (and other) information, fraudsters can imitate the legitimate taxpayer and file fraudulent tax returns seeking refunds,” the report explained.
The study acknowledged if the IRS imposes too strict of a standard to verify the identity of people to prevent stolen refunds it could place a significant burden on legitimate taxpayers.
“If IRS makes the authentication process too stringent, legitimate taxpayers may not be able to successfully authenticate to, for example, access their prior year tax information or have IRS release a frozen refund,” GAO said.
To see the full report, click on: https://bit.ly/2O8ImbP